When selling products, customers can become more interested in your brand if you market items in a particular way. For example, this might mean labelling products as natural or organicHowever, you cannot label your products as, for example, natural and organic, if they do not meet the requirements for that labelling. Doing so could open your business up to a claim of misleading and deceptive conduct. This article will explain what you need to know about misleading and deceptive conduct so that you don’t market your products with misleading labelling. 

What is Misleading and Deceptive Conduct?

Whether conduct is misleading or deceptive depends on the particular circumstance. However, conduct will generally be misleading or deceptive if it could make a person believe something that isn’t true. 

For example, say a consumer who only purchases natural products buys something with artificial ingredients because the packaging made her believe it was natural. In this circumstance, the labelling may have been misleading.

When labelling your product, ask yourself whether someone might believe something about it that isn’t true because of its label. If so, you should change your labelling to avoid a claim of misleading and deceptive conduct.

The Aldi Decision

A recent case involving supermarket chain Aldi highlighted circumstances where the wording on your labels is likely to mislead and deceive consumers. In this case, a natural hair care brand, Moroccanoil, sued Aldi on the basis of misleading and deceptive conduct. This was due to Aldi’s use of the word ‘naturals’ on the packaging of products that did not substantially include natural ingredients.

The court examined the importance of context when assessing whether conduct could mislead or deceive a consumer. In this circumstance, it looked at how:

  • Aldi is a discount supermarket selling discounted products;
  • the word ‘naturals’ was simply a sub-line on the product; and
  • the product did include a small quantity of natural argan oil.  

After considering this context, the court did not find that Aldi had committed misleading and deceptive conduct.

How This Case Could Affect Consumers and Businesses

When labelling your products in a certain way, you should ask yourself whether a reasonable consumer would believe that the product itself is subject to the regulations of that label.

For example, if you’re labelling your product as natural’, would a consumer believe that it is made of natural ingredients? If so, and it’s not, you could be committing misleading and deceptive conduct.

However, the Aldi case reaffirmed that a court will always look at the context of the situation. This is especially important when considering what a reasonable consumer would believe. Therefore, if you are selling a product that includes terms such as ‘natural’, ensure to take a look at all of the relevant circumstances. These include:

  • how many ingredients in your product are natural;
  • how prominently is the word is displayed in the packaging;
  • who is likely to be purchasing your product;
  • where you are selling your product; and
  • what the cost of your product is.

While Aldi escaped legal responsibility, you could still be legally responsible for misleading and deceptive conduct if you label a product falsely. Every situation is different, and the context of your circumstance might prove that your labelling could deceive consumers.

Therefore, you should take precautions to avoid claims of misleading or deceptive conduct. Only use terms like ‘natural’ or ‘organic’ on products that are substantially made of ingredients that are natural or organic. Alternatively, your packaging could contain a prominent disclaimer to ensure that a consumer is not confused.

For example, you should state what percentage of ingredients within the product are actually natural. 

Key Takeaways

When labelling your products, you must ensure that you are not engaging in misleading and deceptive conduct. However, a recent case involving Aldi has proved how the surrounding context of a situation can determine whether or not your labelling is misleading. Therefore, you should always question whether someone might buy your product because of a false representation on the packaging. If so, you may be liable for misleading and deceptive conduct.

If you need assistance to ensure your products are not misleading, contact LegalVision’s advertising compliance lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Charlotte Hale

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